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PTT Global to invest US$11 bln by 2020 in capacity expansion, to focus on specialty and green products

PTT Global Chemical Pcl (PTTGC)- Thailand’s largest petrochemical maker, plans to invest US$11 bln by 2020 to expand capacity and focus on high-margin specialties and green products. This will include investment of US$3 bln to build a new olefins cracker with estimated annual capacity of 1 mln metric tons (1.1 mln tons), Chief Executive Anon Sirisaengtaksin told Reuters in an interview.
Concern about the impact of Europe’s debt crisis has led PTT Global, one of the world’s top 10 ethylene makers, to review its investment plans. This year, PTT will focus on maximizing benefits from a recent merger and “debottleneck” existing facilities to boost output by 70,000-80,000 metric tpa by 2014.The company is looking for a location to build the new cracker to serve growing demand in Asia, especially in China, Indonesia and Vietnam, and it is also looking at building a new bio plastic plant in the next five years. The company plans to move ahead with projects that yield high returns and do not need a lot of investment. High-volume specialties and green products are expected to contribute about 30-40% of the company’s revenue within the next 10 years, up from about 10% now.

Grace inks multi-year agreement with Braskem to develop technologies and solutions to produce green chemicals

W. R. Grace & Co. has signed a multi-year agreement with Braskem to develop process technologies and catalyst solutions to produce green chemicals. The agreement is intended to advance the commercialization of a process to convert renewably sourced feedstocks into value-added products. Grace is a global supplier of innovative catalyst technologies with a leading position in the petroleum refining and polyolefin market segments. Braskem is the leading thermoplastics resin producer in the Americas, with a goal of becoming the world leader in sustainable chemistry by 2020. Details and financial terms of the agreement were not disclosed.The technology under development in the Grace-Braskem collaboration is based on carbon sources from renewable agricultural processes that contribute to lower carbon emissions than traditional feedstocks.
?We are pleased to have the opportunity to work in cooperation with the world leader in green plastics,? said George Young, Vice President of New Business Development at Grace. ?This collaboration demonstrates our commitment to become a leading supplier of catalysts to the renewable chemicals industry.? Braskem is a global leading producer of biopolymers and has announced plans to expand production of sugar-based bio-polyolefins. ?We continue to innovate to meet market needs for more sustainable solutions,? said Edmundo Aires, Vice President of Corporate Innovation and Technology at Braskem. ?We’re convinced this partnership will enable us to do this better.?

BASF to build butadiene extraction plant in Antwerp

BASF plans to build a butadiene extraction plant at its Verbund site in Antwerp, Belgium. The plant will have an annual production capacity of 155,000 metric tons and is scheduled to start up during 2014. The investment amount will be in the high double-digit million euro range. The decision has been made in light of the increasingly tight supplies of butadiene on global markets. In recent years, the volumes of butadiene available on the market have declined sharply. At the same time, demand from the tire industry and other industries has been rising. This has led to a considerable increase in prices.
?With the plant, we will secure our supply of butadiene at a competitive cost,? said Dr. Uwe Kirchgäßner, head of BASF?s regional business unit Basic Petrochemicals Europe. ?Furthermore, we will take advantage of opportunities on the attractive external market and thereby contribute to our long-term economic success,? Kirchgäßner added.
The butadiene will be extracted from crude C4, a product from the steam cracker. ?This plant strengthens our Verbund production in Antwerp and is a very important investment at the site,? said Wouter de Geest, CEO of BASF Antwerpen NV. ?By improving the integration of the C4 value chain, we will also be able to reduce the need for logistics as well as traffic,? added de Geest. Through the investment about 15 to 20 jobs will be created.
In Europe, BASF already operates a butadiene extraction plant at its Verbund site in Ludwigshafen, Germany, with an annual production capacity of 105,000 metric tons. Butadiene is a raw material that can be used to produce synthetic rubber, among other applications. The tire industry is one of the main consumers of butadiene. Other applications for butadiene include paper chemicals and plastics production.

SE Asia?s PVC demand picks up following July decreases

Players in Southeast Asia report that PVC demand has picked up this month despite July not usually being a a good month in terms of PVC demand in the region, as per ChemOrbis. Many buyers who had elected to stay away from the market in June have returned following the steep July decreases implemented in the region?s local markets. The recent upward movement in upstream costs was also cited as a factor supporting healthier PVC demand as many players feel that the market is close to the bottom of its current declining trend.
A source at a Philippine producer stated, ?We lowered our prices by PHP3000-5000/ton ($71-118/ton) for July. We have been receiving a greater number of price inquiries since our most recent decreases, but have not been able to finalize any deals yet. We are hopeful that we will be able to sell more material in July than we did in June.? A PVC compounder in the Philippines added, ?We are looking to purchase some material soon as we did not purchase any material in June.? A Thai converter manufacturing plastic pipes commented, ?Demand for end products is usually sluggish in July owing to the monsoon season, but our end product sales are healthy for now. We are planning to purchase some material soon to ensure that we can maintain stable inventory levels.? A Thai producer also reported seeing unusually healthy demand for July this year, saying, ?Our sales have improved when compared with the past month. Many buyers had been away from the market in June in anticipation of lower July prices, as per ChemOrbis. In addition, end product demand has been bolstered by the fact that some converters are still working to cover the backlogs built up during last year?s flooding.? In Vietnam, a domestic producer said that they lowered their July decrease amount to US$10-30/ton this week after announcing US$45-65/ton decreases on their initial July prices. ?We raised our prices along with firmer upstream costs this week. Our sales have picked up in July following two months of disappointing sales in May and June,? a producer source reported to ChemOrbis. A source at a Malaysian producer added, ?We are optimistic about our sales for July and August even though these months are normally a slow season. We are receiving a greater number of inquiries these days and are currently in negotiations with our customers as we find buyers? price ideas to be too low to accept.?

Formosa Petrochemical, FCFC post unexpected Q2-2012 losses

Units of Formosa Group-Formosa Petrochemical Corp. and Formosa Chemicals & Fibre Corp. have both posted unexpected Q2-2012 losses after a drop in oil and chemical prices drove down their inventory values, as per Bloomberg. A decline in oil prices cut the value of stockpiles held by Formosa Petrochemical, which imports all its crude needs. Crude oil in New York dropped 18% between April and June on concern demand would be hurt by the global economic slowdown and Europe?s debt crisis.
Formosa Petrochemical reported a pretax loss of NT$15.6 bln (US$523 mln) for the three months ended June 30. Formosa Chemicals posted a pretax loss of NT$6.14 bln.
Plastics processor Nan Ya Plastics Corp. reported a loss of NT$2.72 bln. Polyvinyl chloride maker Formosa Plastics Corp. posted a pretax profit of NT$270 mln in the second quarter. Formosa Petrochemical halted its No. 2 and No. 3 naphtha crackers on June 20 because of a power failure. The incident affected 42 of the group?s 66 plants at Mailiao.

Naphtha margins in Asia at month highs, margins under pressure from rising Brent

Naphtha prices in Asia were at a month high on Wednesday, but margins, after surging 18% to a month high the previous day, came under pressure from this week’s rise in Brent crude prices as per Reuters. Front-month, H2-August open-spec naphtha price stood at US$799/ton, while while margins fell nearly 10% toUS$54.48/ton.
Higher price of feedstock naphtha could be a source of concern for petrochemical makers as demand for petrochemicals including plastics has been slow due to the European debt crisis. Petrochemical margins would soon be squeezed again as Brent crude went above US$100 a barrel after hovering below that level for about two weeks.

Protection fee controversy results in volatile PP market in Egypt

Egypt?s PP market witnessed a great deal of volatility in June due to confusion regarding the implementation of a new protection fee announced on import homo-PP prices effective as of June 5, as per ChemOrbis. According to the government?s initial announcement, all homo-PP imports would be subject to a protection fee of 15% or US$267/ton, whichever was largest, for a 200 day period from June 5 to December 22, 2012.
In the face of widespread resistance from buyers, the government later announced a 100 day suspension of the protection fees only to reverse itself later and reaffirm that the protection fees were still in place. An agreement between the Egyptian government and EPPC, the only domestic producer currently active in Egypt, was reached on June 27. According to the terms of the agreement, the protection fees will remain in place. In exchange, EPPC has agreed to fully cover the market?s needs and to set its prices in accordance with monthly global price announcements. The agreement further specified that buyers purchasing from the producer will be required to purchase at least 50 tons of PP per month from EPPC. The Egyptian Plastic Exporters and Manufacturers Association (EPEMA) stated it will monitor the terms of the agreement to ensure that buyers? interests are respected while adding that they will also help coordinate smaller PP buyers into groups in order to ensure that no buyers are frozen out of the market by the 50 ton monthly minimum.
Egypt?s PP market passed a volatile month in June as uncertainty surrounding the status of the new protection fees led to some wild swings in prices, as per ChemOrbis. In the first full week of June, following the initial announcements of the protection fees, locally-held PP prices jumped by more than $250/ton while import prices rose by around US$130-135/ton. One week later, following reports that the protection fees had been suspended, prices plunged back towards their early June levels, with local prices dropping more than US$270/ton and imports sliding by around US$55/ton. This week, local prices spiked by US$240/ton again after the protection fees were reaffirmed while announcements of new July import prices and concerns about weaker post-protection fee demand for imported cargoes pulled down imports by around US$110/ton.

China?s cumulative imports through May remain under 2009

The strain is beginning to show on China?s plastics imports amid an admitted slowdown in economic growth. Cumulative imports through May 2012 reached a figure of 6.255 mln tons, as per ChemOrbis, below cumulative imports as of May 2011, 2010 and 2009.
In May 2009, the cumulative figure had been at 6.956 mln tons. Imports dropped over the following two years with the cumulative May figure at 6.921 mln tons in 2010 and at 6.349 mln tons in 2011 before slumping to this year?s figure of 6.255 mln. Looking solely at imports which arrived in May, they were up compared to April 2012, and higher than May 2011, but below the May figures in 2009 and 2010, as per ChemOrbis.
Homo PP imports were up slightly from April at 269,510 tons. The top ten suppliers to the country were Saudi Arabia, South Korea, Taiwan, UAE, India, Singapore, Japan, Thailand, United States and Brazil through the first five months. LDPE imports were also up compared to April at 122,820 tons. The top ten suppliers were Iran, South Korea, Saudi Arabia, Malaysia, Russia, Qatar, United States, Japan, Thailand, and Germany. PVC imports were also higher than April at 77,408 tons. The top seven suppliers were the United States, Taiwan, Japan, South Korea, Thailand, Indonesia and Germany. PS imports were at 82,199 tons, up from the April figure. The top ten suppliers were Taiwan, South Korea, Hong Kong, Singapore, Thailand, Japan, Malaysia, United States, Saudi Arabia, and India.

Formosa resumes production at some units of petrochemical complex in Yunlin

Taiwan?s Formosa Plastics Group (FPG) has resumed production at 54 out of the complex?s 66 units at its petrochemical complex in Yunlin County, shut adhoc by a power failure mid week. An investigation pinpointed the cause to be malfunctions of the double busbar circuit system at the petrochemical complex?s public utility area. FPG is in the process of completing safety inspections on these sites where the power failure occurred as Tropical Storm Talim approached Taiwan. All affected units are expected to come back online later in the day after these inspections.
The complex houses an oil refinery with capacity to produce 25 mln tpa of crude oil and three naphtha crackers with a combined capacity to produce 2.94 mln tpa of ethylene. The complex also comprises other petrochemical plants, heavy machinery plants, a co-generation power plant and the Mailiao Industrial Harbor.

Initial July PE prices announced lower to China, SE Asia

Players in China and Southeast Asian report that import PE prices for July are being announced with decreases, as per ChemOrbis. Sufficient stock levels, softer upstream costs and disappointing demand were cited among the main reasons for the decline in PE prices. A Thai producer announced their July prices to the Chinese market with decreases of US$130/ton for LDPE film, US$30-40/ton for LLDPE film and US$20/ton for HDPE film. ?Buying interest remains sluggish even at our new price levels,? a source from the producer commented. A source from another Southeast Asian producer stated, ?We lowered our HDPE film prices to the Chinese market by US$30/ton and managed to conclude some deals after additional discount of US$10-20/ton. We are not feeling all that optimistic about our prospects for the month ahead.?
A trader based in Malaysia reported to have reduced their July prices for Southeast Asian LDPE film by US$70/ton in accordance with their supplier?s price reductions. ?Buying interest is not very encouraging these days and we may try to persuade our supplier to concede to further discounts if we can locate some firm bids,? the trader commented. A source from a Southeast Asian producer said, ?We are thinking of announcing our July prices with decreases of US$60/ton for both HDPE and LDPE film. We are holding off on announcing our new prices for now as we want to see some more offers from other producers first.? A converter from Indonesia of plastic bags and packaging products reported receiving July prices from a Middle Eastern source with decreases of US$30/ton for HDPE film and US$60/ton for LLDPE film. ?Even though the offers we received for Middle Eastern imports have moved lower, we are in no rush to purchase for now as supply levels are sufficient in the local market and demand for our end products is not all that encouraging these days,? the buyer told ChemOrbis.